Business and business environment

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Table of Contents
LO1 Explain the different types, size and scope of organizations..................................................3

P1 Explain different types and purposes of organizations; public, private and voluntary sectors
and legal structures.......................................................................................................................3

P2 Explain the size and scope of a range of different types of organizations..............................3

M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization................................................4

LO2 Demonstrate the interrelationship of the various functions within an organization and how
they link to organizational structure................................................................................................7

P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure........................................................................................7

M2 Analyze the advantages and disadvantages of interrelationships between organizational

functions and the impact that can have upon organizational structure........................................7

D1 Provide a critical analysis of the complexities of different types of business structures and
the interrelationships of the different organizational functions...................................................8

LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact
the macro environment has on business operations.......................................................................13

P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples...............................................................................13

M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro-
environment within an organization..........................................................................................14

LO4 determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors................................................................................15

P5 Conduct internal and external analysis of specific organizations in order to identify

strengths and weaknesses...........................................................................................................15

P6 Explain how strengths and weaknesses interrelate with external macro factors..................16

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 M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making........................................................................................................................................17

D2 critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.................................................................................................18

Conclusion.....................................................................................................................................19

References......................................................................................................................................20

3
LO1 Explain the different types, size and scope of organizations

P1 Explain different types and purposes of organizations; public, private and voluntary
sectors and legal structures
Introduction to different types of organizations

The associations successfully portrayed the scope & size of business association and furthermore
incorporated the lawful component for depicting the grouping of Private, Voluntary and public
area association. There are way better belief system and uniqueness applied to discover
characterization and size. The business may incorporate various parts, scopes, work, missions,
dreams, and so on. The internationalization of businesses is the components that are fundamental
for the cutting edge economy that incorporated into the type of centre business systems which
gave quick development and persistent advancement for the business. This is basically a
multidimensional procedure that incorporates social contrast, tax assessment and legitimate
issues, conversion scale and political hazard for any business association.

Business organizations are basically various sorts, for example, private, public and voluntary or
third sector. Private associations are identified with the corporate parts and joined with various
and different associations. The private areas associations are a worry with the worldwide
associations is fundamentally manage products and administrations for the overall population
and investigate the business globally. The acknowledgement of public organizations is somewhat
less and commitment private segment association is higher. Another fixation is in the voluntary
sector which is intentional associations. These associations fundamentally work for the open
recipients by taking budgetary help from the legislature and private association. Philanthropy,
hosing for individuals to live, and so on be the best instances of these associations are referenced
beneath.

P2 Explain the size and scope of a range of different types of organizations

Size & scope of private sector organization

This organization is basically working with more than 128000 employees across the countries.
They are currently operating in more than 60 countries along with more than 4500 varieties of
clothes verities. It was founded in 1947 by Erling Persson. The market share in clothing industry

4
has been covered by this organization is more than 38%. They have covered almost every
segment of customer and provide numbers of verities in the business. The size of this
organization can be defined by their exploration and diversification. They acquire employees
from various international platforms like online interviews, hiring from different universities, etc.
The scope may be defined as strategies for their business plan, patterns, business position,
viewpoints and tactics.

Scope and size public sector organization

Different capacities provided by BBC additionally, for example, film, friendliness, the travel
industry, reporting. This has just conceivable by their business capacities and their workers. The
workforce of in excess of 320,000 representatives and obtain in excess of 15,000 representatives
consistently.

Scope and size of voluntary organization

Cancer research trust is essentially a UK based non-administrative association working for the
welfare of the social orders of the UK and general individuals. This association isn't working for
any income age or benefit making reason. They are having right around 40,000 of volunteers
working inherently. They give administrations like houses, nourishment, garments, and so forth
these are the essential necessities through the significant work they do to cancer patients.

M1 Analyze how the structure, size and scope of different organizations link to the business
objectives and product and services offered by the organization

H&M

Products and services

They are currently providing clothing market to their external forces. The dealing of products
and services is in terms of delivering different verities of cloths and clothing accessories to the
customers. The massive numbers of verities are available in their stores. They enable their
customer to buy their customers to buy products online or from the stores directly (Doherty and
McAdams, 2019).

Vision, Mission and business objectives

5
The vision of this organization is to increase the market share of up to 45%. The managers have
also decided to explore their business by introducing other accessories such as watches, glasses,
belts, etc.

The mission of this organization is to target each customer in the countries they are serving.
Customer loyalty and satisfaction is one of the most effective and great factors.

Business objectives of this organization are to enhance the market share, to make enrichment in
product quality, to deliver products at very reasonable prices.

BBC

Products and Services

The conveyance of current data and broadcasting of data and news through their official channels
is the primary administrations they give (Amankwah-Amoah, and Wang, 2019).

Vision, crucial business destinations

The mission is to advance the people groups' lives with the projects and administrations they
give to make them mindful and convey current data about the articles. The vision of individuals
can likewise get influenced in positive terms.

BBC's vision is to build familiarity with individuals with everyday life difficulties and instruct
individuals with most extreme potential assets. They need to turn into the greatest telecom
organization over the world, in spite of the fact that they are the greatest telecom organization in
Europe.

Business objectives of the BBC are to increase the trust of customers, to delivers fast-paid
services to the users, concerning the main audiences, to delivering fresh information to the users.

CANCER research trust

Products and Services

Cancer research trust works for social advantage and gave a medical advantage to society. They
fill in as a non-benefit business and improve the wellbeing and consciousness of society.

Vision, mission and business goals

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The mission is of administration and part of any association with the objective of the business.
The association gave free therapeutic pack and medical facilities for the patient and gives
learning about the destructive impacts of the illness.

The vision of the business is giving nature of administration and consumer loyalty with the safe
business condition. They likewise have the vision to decrease the malignancy quiet over the UK
through their medications and cure.

Their business objectives are to deliver services security and provide justice for services, to
provide health education services to people and to promote the health and effects on cancer
releases services (Kirsop-Taylor, 2019).

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LO2 Demonstrate the interrelationship of the various functions within an organization and
how they link to organizational structure

P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.
Different business functions of H&M

H&M is the organization providing products to the customer for every segment and delivery of
higher quality services by operating their business functions. The functions of business include
some aspects such as:

 The financial area of H&M: The area of finance is responsible for recording and
maintaining its all financial records. The recording of cash transactions is including.
 Human resources of H&M: This function of this organization helps to acquire a skilled
workforce through selection & recruitment.
 Marketing area of H&M: This function helps to work for identification of market and
demand. This is the most important function because new product development depends
on these functions.
 Production function H&M: This function is including total management quality and six
sigma approaches in order to include high-quality goods to the customers.
 Administration area H&M: This function is derived for making additional services
such as cloud computing, intranet services, employee identification, etc.

M2 Analyze the advantages and disadvantages of interrelationships between organizational

functions and the impact that can have upon organizational structure
Advantages & disadvantages

Advantages

 The team management effectiveness and advanced programs engaged with this.
 The HR department of H&M provides required competencies for their employees
(Osmundsen, et. al., 2019).

Disadvantages

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  The inefficiency of collaboration and delegation of authority.
 Overutilization of bureaucracy.

D1 Provide a critical analysis of the complexities of different types of business structures

and the interrelationships of the different organizational functions
Private sector organization

The selected organization in the private sector is H&M (Hennes & Mauritz). This is the most
recognizable and one of the leading organizations across several countries exploring their
services and products. H&M is basically a fast-fashion clothing store for all segments of
customer such as children, men & women. They are delivering the products through stores and
online and exploring their services. H&M is the second-largest clothing store in retail industry. It
was founded in 1947 and the area they covered is worldwide.

Legal structure

Source 1: (researchgate, 2017)

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The legal structure is deriving the organizational structure that how many departments and
function are currently running in this organization.

Key stakeholders of H&M

The key stakeholders are as follows:

Internal key stakeholders of this organization are its managerial hierarchies, employees,
administration department, R&D department, etc. On another side, the external key stakeholders
can be measured as customer, vendors, retailers, communities, governments, etc.

Public sector organization

BBC is the world's most established and biggest telecom association which is broadly spread
over the world and conveying their administrations characteristically. It was set up by the Royal
charter and established for the benefit of government-endorsed permit free. This is the
association essentially taking a shot at the preparation of graduates, business innovations, news-
casting and creations through ability chasing plans.

Organizational and legal structure

10
Figure 2: (hierarchy structure, 2018)

Basically BBC is a public organization but still there are some factors include different functions
& departments including various functions as showing in this figure.

Key stakeholders

The internal key stakeholders can be defined as its employees and managerial hierarchies. The
external key stakeholders can be defined as users, broadcast partners, banks, governments, etc.

Voluntary sector organization

Cancer Research Trusts of UK are worked for mindful the individuals of social structure the
disease cancer. The examination group and workforce is work with a couple of staff individuals
that gave an eating regimen plan and information about the elements that decreased the hazard
for their life (Aydiner, et. al., 2019). Cancer look into board is bolstered by the few numbers

11
partners, and this kind of business association is work for social mindful from the tumours
illness.

Organization and legal structure

Source 3: (Manchester, 2019)

12
This organizational and legal structure has derived collaborations with different doctors,
surgeons, etc. The pieces of advice of professors and expertise for providing the knowledge of
cancer are derived.

Key stakeholders

The internal stakeholders of this voluntary organization are their volunteers and employees.
External stakeholders are the mostly professors of universities, medical surgeons and doctors,
etc.

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LO3 Use contemporary examples to demonstrate both the positive and negative
influence/impact the macro environment has on business operations

P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
It is clearly visible by the performance of H&M that they are drastically upbringing but still
several factors and aspects of the macro environment that are affecting the business operations in
both positive and negative ways. Every coin has two sides negative and positive; similarly the
macro environment of H&M has also two sides negative and positive. The aspects which are
affecting the business operations of H&M in both positive and negative terms such as:

Positive impacts

 Gaining access to new customers: The macro business environment of the H&M
considers this as the first benefit of macro environment where they can easily encounter
new customers for their business. It helps to offer new products to the customers
according to the recent trends that ultimately affect the business operations in positive
terms and increase the profit & growth of the business.
 Achievement in enhancement in lowering the cost: Lowering the cost on the basis of
market research and customer buying behaviour helps to increase the firm
competitiveness. Numbers of companies sell their products but H&M critically analyze
their external business environment (Martinez, et. al., 2019).
 Capitalization through core competencies: The third advantage is capitalization
because analyzing the market conditions through the external environment can help the
managers of H&M to incur capital for new product development. The external business
environment helps to find the taste of customers and prevent the organization to invest in
outdated designs of fashion products.

Negative impacts

 Quick changes of customers’ buying behaviour: The analysis of macro environment

can reduce the sale of products developed by the company because the fashion-oriented

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 industry the styles and fashion get change any time. It may affect production and make
stock dead.
 Regulations and legal policies through the government: It is very important to follow
governmental restrictions even though the company is having negative impacts. It creates
limitations in organizational productivity.
 Adaptation of technology and acceptance of change: It is very hard for the employees
to accept the changes and it also affects the organization financially if any new
technology comes in the market.

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M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro-
environment within an organization.
The PESTLE analysis is described as the outgrowth performance of H&M. Some of the business
includes environmental factors that influence the business of H&M organizations. The PESTLE
analysis is the great techniques which include different aspects such as:

 Political factors: The political factors include the globalization and political viewpoints
in order to give a significant view of their performance. The organizational policies,
parliamentary, governmental decisions may include in this function.
 Economical factors: The economical factors of this organization are deriving the interest
rates, tax rates, custom duties, excise duties, value-added tax rates have included these
are the factors which are influenced by the market condition and governmental aspects.
 Social factors: The social factors include different functions which derived the social
activities in the business. The social factor relies on business culture, attitudes, values,
social trends and lifestyle of people (Stoyanova, 2019).
 Technological factors: Every business function does not include only business practices
because the innovations and technological factors also play a vital role in the business.
Moreover, technical changes may derive different payment methods and online selling
techniques in the business.
 Legal factors: H&M is one of the leading business organizations in the clothing industry
and the biggest reason behind is following the legal policies and regulations intrinsically.
The legal policies followed by H&M are for ethically performing the work.
 Environmental factors: The environmental aspects also need to be addressed because
various functions in the organization provide a critical review of launching new products
in the market. H&M is dealing with inhomogeneous products with higher efficiency.

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LO4 determine the internal strengths and weaknesses of specific businesses and explain
their interrelationship with external macro factors.

P5 Conduct internal and external analysis of specific organizations in order to identify

strengths and weaknesses.
The internal and external analysis for identifying the strengths and weaknesses of H&M include
several aspects mentioned underneath:

Internal analysis

 Cost structure: The cost structure includes what are the aspects that need investments
and value-added components that affect the strength of the organization (Klepac and
Berg, 2019).
 Organizational structure: How the organization works with its designations and
hierarchies also affects the business strengths and weaknesses.
 Technological and innovative aspects: The organization can derive its strengths and
weaknesses on their own. It’s up to them whether they want to acquire the technology or
not.

External analysis

 Competitors: These are the biggest factors which affect the strengths and weaknesses in
terms of their reactions and acquisitions.
 Business environment: It affects the strengths and weaknesses in a way that is outside
the control of the business such as recent trends, governmental policies, consumers
buying behaviour, etc.
 Supply chain management and distribution system: The identification of channels of
distribution systems in a well-defined manner also affects the changes in a positive
manner (Wahyuningsih, et. al., 2019).

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P6 Explain how strengths and weaknesses interrelate with external macro factors.
The internal and external business factors affect the business external macro factors in several
terms such as mentioned underneath:

 Size and growth: it helps to identify what are the potencies of the market that are
important for reducing weaknesses and increase the strengths.
 Profitability: For each business factor it’s only up to the profit and higher growth. The
only perspective of driving the factors of external business environment is to enhance the
strengths and eliminates the weaknesses.
 Marketing trends: The recent trends also affect the business environment which turns
the operational factors accordingly (Pietroń, 2018).
 Technology and economy: The economic and technological factors both are consisting
of business activity. Strength of an organization is when no one using the technology
H&M is using.

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M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making.
By developing the analysis of their strengths and weaknesses, H&M can easily find their critical
key aspects in the long run. The tool of SWOT analysis is done as underneath:

Strengths
 A wider range of products
 It also sells its product portfolio for the
customer target group.
 Expended potential markets in various
countries
 Strong financial position in the market.
Opportunities
 Explorations focus through profitability
 Advantages of E-commerce
 Creations of demands for new products
 Opportunity another brand to capitalize
on new products.
Weaknesses
 Bad customer experiences
 Affordable prices affect their quality
 Lack of independence of suppliers
 Third-party involvement
Threats
 Labour turnover
 Intense and cut-throat competition
 Foreign exchanges market rates
 The entrance of new competitors
through E-commerce (De Villa, et. al.,
2015).

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D2 critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.
The impact of both micro and macro business environment can be done in various ways but the
organization need to analyze the situations that how they are considering these aspects. The
micro and macro factor and affect the business objectives and decision-making as follows:
Impact of the micro-business environment
 It affects the supply chain management that controls the success of the business through
acquiring the suppliers for delivering the products to right customer.
 The customers buy the product for self-satisfactions and according to the recent trends so
it also approaches the marketing systems.
Impact of the macro business environment
 The contribution to the economy with the best organizational production that generates
profit and revenue. It only possible if the decision-making process adapts effectively.
 Social and cultural forces also affect the products and services of H&M brand. It brings
products to the market in order to make them aware of new product development (Pan, et.
al., 2018).

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Conclusion
On the basis of this report, it has been concluding that H&M is required acquire new techniques
that are not in the market or have not been utilized by any other organization. The organizations
are required to involve many functions in organization in order to follow legal policies. Some of
the legislations have passed by the government in order to restrict the global tariff restrictions.
The social factors include customer orientations mainly taste and preferences of customers and
current market solutions. The main objective of this function is to provide advancement in the
business. The policies govern by H&M is same for all their outlets and stores are currently
running in the market. If they hey use very high-quality fabrics and natural colours for
manufacturing the products so the targeting of new customer can become very easy. Hence, the
identifications these factors of macro and microenvironment are way beneficial.

21
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